Moneysupermarket.com Group PLC 2009 Interim Results Presentation 4 August 2009 1
Agenda Introduction: Gerald Corbett Financial Review: Paul Doughty Business Review and Marketing: Peter Plumb/David Osborne Questions and Answers: moneysupermarket.com 2
Summary New team settled in well Business reconfigured for the credit crunch Trading stabilised Series of improvement programmes beginning to make a difference, especially marketing Interim dividend maintained Special dividend a sign of confidence in the future 3
Paul Doughty Chief Financial Officer Financial Review 4
Summary financial highlights H1 2009 Profitability has stabilised H1 2009 managed margin EBITDA and EBITDA margins ahead of H2 20 Visitors 3% ahead of same period last year despite significantly lower marketing spend both on and offline New creative launched mid June Money Vertical traded consistently throughout H1 2009 RPV improving throughout 2009 Cash generation remains very strong Special dividend of 25m to be paid in addition to the interim dividend 5
Adjusted income statement H1 2009 H1 20 H1 20 H2 20 H2 20 m m Variance m Variance Revenue 68.5 99.4 (31%) 79.4 (14%) Internet 67.8 95.3 (29%) 77.2 (12%) Intermediary 0.7 4.1 (83%) 2.2 (68%) Gross Profit 47.7 66.6 (28%) 50.1 (5%) Gross Margin 69.6% 67.0% 63.1% Adjusted Administrative Costs (21.8) (26.2) (17%) (24.1) (10%) Impairment of Goodwill - (70.0) (100%) Amortisation of Intangibles (12.6) (12.6) (12.6) Distribution Costs (9.3) (11.8) (21%) (9.8) (5%) Adjusted Operating Profit 4.0 16.0 (75%) (66.4) (106%) Reconciliation to adjusted EBITDA Adjusted Operating Profit 4.0 16.0 (75%) (66.4) (106%) Impairment of Goodwill - 70.0 (100%) Amortisation of Intangibles 12.6 12.6 12.6 Depreciation 2.0 1.5 33% 2.0 Adjusted EBITDA 18.6 30.1 (38%) 18.2 2% Adjusted EBITDA Margin 27.2% 30.3% 22.9% See Appendix for explanation of differences between statutory and adjusted revenue and EBITDA 6
Adjusted cost base H1 2009 v H1 20 ( 3.2m) 0.5m ( 2.1m) 0.4m ( 11.5m) ( 3.0m) 70.8m 51.9m H1 20 Staff Costs Depreciation Irrecoverable VAT Other Admin Internet Marketing Intermediary Marketing H1 2009 (1) Excluding amortisation of intangibles, goodwill impairment, pre-ipo option charges, and option charges relating to the Simon Nixon scheme (2) Includes cost of sales (3) Detailed breakdown included in the appendix 7
The shape of revenues changed markedly H1 2009 v H1 20 H1 20 internet revenue H2 20 internet revenue H1 2009 internet revenue Travel, 11.1m, 12% Home Services / Other, 4.1m, 4% Money - credit, 34.0m, 36% Home Services / Other, 3.3m, 4% Travel, 8.0m, 10% Money - credit, 21.4m, 28% 34% Travel, 9.5m, 14% Home Services / Other, 2.6m, 4% Money - credit, 13.4m, 19% Money - other, 5.2m, 8% Insurance, 39.7m, 41% Money - other, 6.3m, 7% Insurance, 38.0m, 49% Money - other, 6.6m, 9% Insuranc, 37.1m, 55% Source: Company data and audited accounts Note: Credit includes revenues from loans, mortgages and credit cards 8
Insurance - Half year highlights Trading improving into Q2; higher RPT Revenues declined 6% against H1 last year and in line with H2 Q2 better than Q1 Visitors declined 8% against H1 last year but increased 4% against H2 Actively managed margin rather than volume New creative launched mid June Higher RPT through stronger commercial terms with providers and improved search functionality Decline in other revenues Sales of Telephone leads which generated 2.5m in FY ( 1.5m in H1 and 1.0m in H2) which were discontinued in 2009 to improve customer experience H1 2009 H1 20 Variance H2 20 Variance Insurance Visitors ('m) 12.1 13.2 (8%) 11.6 4% Transactions ('m) 6.8 8.2 (17%) 7.2 (6%) Click Revenue ( m) 33.7 34.2 (1%) 33.1 2% Other Revenue ( m) 3.4 5.5 (38%) 5.0 (32%) Total Revenue ( m) 37.1 39.7 (6%) 38.0 (2%) RPV 3.06 3.01 2% 3.28 (7%) RPT 4.97 4.17 19% 4.60 8% 9
Money - Half year highlights Trading stabilised; visitors numbers ahead Revenue declined by 54% against H1 2009 and 34% against H2 20 Availability of credit product Significantly down on 20 but stabilising Q1/Q2 2009 Withdrawal from market of a number of providers in 20 First Plus closed for new business in August 20 having generated 9.2m revenues in H1 20 and 4.0m in H2 Visitors grew 8% v H1 and 9% v H2 Declines in credit channels Growth across all other areas of Money Reduction in RPV against H1 and H2 20 from changing sales mix but RPV has been stable throughout H1 2009 H1 2009 H1 20 Variance H2 20 Variance Money Visitors ('m) 19.1 17.7 8% 17.5 9% Transactions ('m) 5.8 7.9 (26%) 7.1 (18%) Click Revenue ( m) 15.8 33.4 (53%) 24.0 (34%) Other Revenue ( m) 2.8 6.9 (59%) 4.0 (29%) Total Revenue ( m) 18.6 40.3 (54%) 28.0 (34%) RPV 0.97 2.28 (57%) 1.60 (39%) RPT 2.69 4.22 (36%) 3.38 (20%) 10
Travel - Half year highlights Trading in line with market; managed for margin Revenue down 15% to 9.5m in H1 Weakness in demand for discretionary weekend type travel Hotels and Flights channels impacted Package holidays performing well Passenger numbers down 15% leaving UK Visitors down 12% on H1 20 Managed for margin RPV broadly consistent with H1 20 but ahead of H2 20 New site launched April 2009 Cruise channel launched June 2009 H1 2009 H1 20 Variance H2 20 Variance Travel Visitors ('m) 24.0 27.3 (12%) 21.6 11% Transactions ('m) 17.0 22.7 (25%) 15.5 10% Click Revenue ( m) 8.5 9.7 (13%) 7.1 21% Other Revenue ( m) 1.0 1.4 (32%) 0.9 8% Total Revenue ( m) 9.5 11.1 (15%) 8.0 19% RPV 0.40 0.41 (2%) 0.37 8% RPT 0.50 0.43 16% 0.46 9% 11
Cash Cash balances of 75.6m at 30 June 2009 19.1m of cash generated before tax and dividend payments 100% of EBITDA converted to cash Capital light business 1.7m 0.6m ( 1.9m) ( 5.7m) 12.6m 2.0m ( 11.1m) 3.9m 0.1m 73.5m 75.6m Cash at 31 Dec 20 Adj. Operating Profits Depreciation Amortisation of Intangibles Working Capital Movement Interest Income Capex Tax Dividend Other Cash at 30 Jun 2009 12
Interim Dividend held; Special Dividend announced The Board remains confident in the ability of the Group to continue to generate cash from operations The Board proposes to pay an interim dividend equal to the interim dividend paid in 20 equating to 1.3p per share The Board proposes that in addition a special dividend of 25m equal to 4.93p per share be paid alongside the interim dividend with reference to the following dates Ex Div Date 16 September 2009 Payment Date 16 October 2009 13
Peter Plumb Chief Executive Officer Business Review 1. How is the business shaping up? 2. How is marketing working harder? 3. Future growth levers 4. Q3 outlook based on July trading 14
Moneysupermarket.com Saving customers money on their household bills 15
Our brands retained their leadership positions in an ever more competitive market moneysupermarket.com travelsupermarket.com 60.00% 50.00% 50.00% 40.00% 45.00% 40.00% 35.00% 30.00% 30.00% 20.00% 25.00% 20.00% 10.00% 15.00% 0.00% Jan- Feb- Mar- Apr- May- Jun- Jul- Aug- Sep- Oct- Nov- Dec- Jan- 09 Feb- 09 Mar- 09 www.moneysupermarket.com www.confused.com www.gocompare.com www.comparethemarket.com www.moneyextra.com www.uswitch.com Apr- 09 May- 09 Jun- 09 10.00% 5.00% 0.00% Jan- Feb- Mar- Apr- May- Jun- Jul- Aug- Sep- Oct- Nov- Dec- Jan- 09 Feb- 09 Mar- 09 Apr- 09 May- 09 Jun- 09 www.fool.co.uk www.beatthatquote.com www.tescocompare.com www.travelsupermarket.com www.cheapflights.co.uk www.travelzoo.co.uk www.moneyexpert.com www.skyscanner.net www.kayak.co.uk www.sidestep.com Source: Hitwise 16
We have done what we said we would do Organisation now aligned to the new economic environment Continued to build new management team Headcount at 470 saving 180K/mth on salaries More flexible IT resource Re-engineered systems are on track New Travel site launched taste of things to come Re-engineered base architecture on track Customers and providers are at the heart of our business Customers are looking for someone to trust, and rate Moneysupermarket.com highly FMCG best practice working with providers Germany launched Live Jan and enhanced service delivered July 17
Our marketing investment is now working much harder 20 we spent 84* million on marketing 2009 we need more for less Numbers Exclude Irrecoverable VAT H1 2009 H1 20 Var % Online spend ( m) 20.3 27.4-26% SEO Team Headcount 21 18 Offline Spend ( m) 9.3 11.7-21% Visitors (m) 63.6 62.0 3% * Includes irrecoverable VAT 18
We have a great product! 19
TV is tip of an FY 84m spend! c.25% offline (TV, radio, print etc..) c.75% online/ partners/ crm 20
Online paid search is now better controlled We bid on over 1.5m keywords Source: Efficient Frontier, Google AdWords 21
In natural search we are best in class Insurance Money Travel Other Keyword Position Keyword Position Keyword Position Keyword Position car insurance cheap car insurance home insurance house insurance travel insurance cheap travel insurance life insurance pet insurance 2 credit cards 1 flights 1 broadband 1 1 credit card 1 flights to Paris 2 cheap broadband 1 loans 1 flights to Majorca 2 broadband internet 1 cheap loans 1 UK breaks 1 gas suppliers 1 2 mortgages 1 cheap car hire 1 cheap gas 1 1 savings 1 car hire in Paris 1 savings accounts 1 bank accounts 1 car hire in Portugal 1 Spain holidays 2 cheap electricity 1 electricity prices 1 1 1 1 3 mobile deals 2 Source: Google.co.uk Friday 17th July 2009 22
More efficient offline spend is delivering results 23
Cross sell is demonstrating the value of our product range High impact creative Relevant insight Cross-vertical visits 24
H1 20 H1 2009 Motor Market Non PCW users PCW Researchers PCW Switches We see solid long term growth potential for insurance business Insurance providers listed (Motor & Home) Motor Insurance market (Million policies by source) Av saving per year per switch from a PCW (Motor ) 159 24 First 147 12 94 Second 111 8 Third 96 4 Fourth+ 100 Year of consecutive Switching Source: Internal Data June vs June 09 Source: OC&C Strategy Consultants Source: OC&C strategy consultants Consumer survey (n=291) approximately how much did you save on the annual cost of your motor insurance before switching? 25
Q2 07 Q3 07 Q4 07 Jan- Feb- Mar- Apr- May- Jun- Jul- Aug- Sep- Oct- Nov- Dec- Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Q1 Q2 Q3 Q4 Q1 09 Q2 09 Mortgages Loans Cards* Savings In Money, despite a changed mix, product availability and transactions are stabilising 20,000 18,000 16,000 14,000 12,000 10,000 Credit availability has flattened Money transactions have also stabilised Mortgage Products Available Transactions (000) Provider count 8,000 6,000 120 100 80 60 40 262 214 207 175 122 130 Moneysupermarket.com has maintained a strong product range throughout /09 90 76 57 39 49 42 74 69 4,000 2,000 0 20 0 Total number of mortgage products Overall CS indicator (RHS) Cur Accs / Savings / Credit Cards Sales Loans / Mortgage Sales Jun- Jun-09 Source: Credit Suisse research estimates, Source: Internal Mortgage, loans, savings and Source: Internal Data June vs June 2009. cards transactions * 0% balance transfer 26
Our travel business is well placed for a returning market with an increasing product offering and new site Travel providers listed Travelsupermarket.com New Travel site launched H1 152 125 H1 20 H1 2009 Source: Internal Data June vs June 2009 27
Outlook and Current Trading Overall Good start to 3 rd quarter H2 revenues 10% - 15% ahead of H1run rate July revenues circa 15% down against run rate Q3 revenues last year H2 profitability single digit ahead of H1 run rate July profitability circa 15% down against run rate Q3 profitability last year Q4 typically is weakest quarter Home Services Trading consistent with H1 run rate Travel Market remains flat with trading in line H1 run rate Revenues circa 20% down against last year continue managing margin Money Evidence of stabilisation with current volumes ahead of H1 run rate July revenues circa 40% down against same period last year Improvement over H1 performance Insurance H2 revenues significantly ahead of H1run rate July revenues increased circa 10% against same period last year 28
Agenda H2 2009 and beyond Products Broadest range of products Right product not just the cheapest Technology Flexible architecture Best intuitive customer journey Marketing Long term relationship with customers Maintaining our enviable brand position Efficient communication strategy 29
Questions and Answers 30
Appendix Additional Financial Materials 31
Adjusted EBITDA H1 2009 H1 20 Var. Var.% H2 20 Var. Var.% FY 20 FY 2007 Revenues Internet 67.8 95.3 (27.5) (29)% 77.2 (9.4) (12)% 172.5 152.2 Intermediary 0.7 4.1 (3.4) (83)% 2.2 (1.5) (68)% 6.3 10.7 Total 68.5 99.4 (30.9) -31% 79.4 (10.9) (14)% 178.8 162.9 Gross Profit 47.7 66.6 (18.9) -28% 50.1 (2.4) (5)% 116.7 1.6 Margin % 70% 67% 63% 65% 67% Administrative costs (37.0) (42.1) (5.1) -12% (107.5) 70.5 (66)% (149.6) (72.2) Distribution Costs (9.3) (11.8) (2.5) -21% (9.8) 0.5 (5)% (21.6) (19.6) Operating Profit 1.4 12.7 (26.5) -89% (67.2) 68.6 (102)% (54.5) 16.7 Operating Profit 1.4 12.7 (11.3) (89)% (67.2) 68.6 (102)% (54.5) 16.7 Profit Share and Pre IPO 2.6 3.3 (0.7) (21)% 0.9 1.7 189% 4.2 4.4 share based payments Amortisation of 12.6 12.6 0% 12.6 0% 25.2 25.2 Depreciation 2.0 1.5 0.5 33% 2.0 0% 3.5 1.6 Impairment of goodwill n/a 70.0 (70.0) (100)% 70.0 - Adjusted EBITDA 18.6 30.1 (11.5) -38% 18.3 0.3 2% 48.4 53.0 Margin % 27% 30% 23% 27% 33% 32
and direct to site revenue maintained on significantly reduced TV expenditure H1 20 revenue share H1 2009 revenue share 34% Partners, 14% Partners, 12% Direct (incl. SEO), 62% SEM, 25% Direct (incl. SEO), 61% SEM, 26% Source: Company data Direct to site revenue continues to be the largest part of the revenue mix 33
Adjusted cost base H1 2009 v H2 20 Adjusted Cost Base (1) H1 2009 m H1 20 m Variance Variance % H2 20 m Variance Staff Costs (ex. Making Money) 13.0 14.8-1.8-12% 12.3 6% IT Contractors 0.2 1.6-1.4-88% 1.7-88% Depreciation 2.0 1.5 0.5 33% 2.0 0% Irrecoverable VAT 2.5 4.6-2.1-46% 3.8-34% Other Admin 4.2 3.8 0.4 11% 4.2 0% Total Adjusted Admin 21.9 26.3-4.4-17% 24.0-9% TV Advertising 7.8 10.4-2.6-25% 8.6-9% Other Marketing/PR 1.5 1.3 0.2 15% 1.3 15% Total Distribution Costs per P and L 9.3 11.7-2.4-21% 9.9-6% Other Online Marketing Costs (2) 20.3 29.4-9.1-31% 27.4-26% Intermediary Marketing Costs (2) 0.4 3.4-3.0-88% 1.8-78% Total Marketing Costs 30.0 44.5-14.5-33% 39.1-23% Total Adjusted Cost Base Below Gross Margin 31.2 38.0-6.8-18% 33.9-8% Total Adjusted Cost Base 51.9 70.8-18.9-27% 63.1-18% (1) Excluding amortisation of intangibles, goodwill impairment, pre-ipo option charges, and option charges relating to the Simon Nixon scheme (2) Includes cost of sales (3) Detailed breakdown included in the appendix 34
Home Services - Half year highlights Utilities revenues weaker; Visitor Growth Revenue decreased by 42% to 2.4m against H1 20 Switching environment for utilities less favourable climate of stability/falling prices Visitors increased by 119% to 8.4m Driven by launch of shopping channel in Oct New vouchers channel launched Significant change in sales mix impacts RPV and RPT H1 2009 H1 20 Variance H2 20 Variance Home Services Visitors ('m) 8.4 3.8 119% 7.4 14% Transactions ('m) 1.9 0.9 120% 2.0 (4%) Click Revenue ( m) 2.3 4.0 (42%) 3.3 (26%) Other Revenue ( m) 0.1 0.1 Total Revenue ( m) 2.4 4.1 (42%) 3.3 (27%) RPV 0.29 1.07 (73%) 0.45 (36%) RPT 1.22 4.62 (74%) 1.65 (25%) 35
Statutory balance sheet June 2009 m June 20 m Intangible assets 211.1 306.3 Other non-current assets 13.7 16.2 Net current assets / (liabilities) 68.6 60.2 Long term liabilities (43.4) (50.7) Net assets 250.0 332.0 Capital and reserves 250.0 332.0 Intangible assets include 55m of goodwill, and 156.1m of other intangibles associated with the acquisition of MSFG 70m Goodwill impairment charge in 20 Net current assets includes cash of 75.6m as at the end of June 2009 The long term liability represents the deferred tax liability relating to the tax amortisation benefit of the intangibles assets recognised upon the acquisition of MSFG 36
Accounting information share option charges (cont d) Pre-IPO 13.6m unapproved options issued 2007 to vest 20 2010 with exercise price of 6p 1.2m SIP/Chairman awards issued 2007 to vest 2010 with an exercise price of nil pence 0.5m options under Simon Nixon scheme issued and vested during 20 with an exercise price of nil pence Black Scholes Model used to calculate charge and then adjusted based on number expected to vest Simon Nixon Scheme from Prospectus Simon Nixon to make available up to 0.8% (4m shares) of issued share capital to senior management with scheme to be cash settled by Simon Nixon No share based payment charge anticipated at IPO in accordance with IFRS2 IFRIC 11 issued in 20 changes accounting treatment to provide consistency for cash settled schemes with equity settled schemes funded by individual shareholders 0.5m options under Simon Nixon scheme issued and vested during 20 with an exercise price of nil pence No impact on Company Backed out of adjusted EBITDA as pre IPO No impact on distributable reserves Charges based on share price of 47p (2009) 37
Accounting information (cont d) Post-IPO 1.2m LTIPs options issued Dec 2007 which vest in 2010 with an exercise price of nil 7.4m LTIPs options issued in April 2009 which vest in 2012 with an exercise price of nil Post IPO options are included as a charge against adjusted EBITDA Charge ( m) 20 2009 2010 2011 Pre IPO options / SIPs 3.9 1.9 0.7 Simon Nixon Scheme 0.3 1.3 nil nil Post IPO LTIPs 0.2 0.2 0.5 0.5 * There will be also be a charge included in admin charge for PAYE and Ers NI incurred on settlement of the options of 0.8m which will be offset by an equal and opposite credit to corporation tax in 2009 38
Accounting information (cont d) Tax Tax charge of 1.2m giving effective rate of 65% Higher than statutory tax rate of 28% due to: Trapped losses in Germany The level of disallowed share based payment charges versus the schedule 23 deduction. 39
Vertical KPIs by half year H1 2009 H1 20 Var H2 20 Var Money Visitors ('m) 19.1 17.7 8% 17.5 9% Transactions ('m) 5.8 7.9 (26)% 7.1 (18)% Revenue ( m) - Click-based 15.8 33.4 (53)% 24.0 (34)% Revenue ( m) - Total 18.6 40.3 (54)% 28.0 (34)% RPV 0.97 2.28 (57)% 1.60 (39)% RPT 2.69 4.22 (36)% 3.38 (20)% Insurance Visitors ('m) 12.1 13.2 (8)% 11.6 4% Transactions ('m) 6.8 8.2 (17)% 7.2 (6)% Revenue ( m) - Click-based 33.7 34.2 (1)% 33.1 2% Revenue ( m) - Total 37.1 39.7 (7)% 38.0 (2)% RPV 3.06 3.01 2% 3.28 (7)% RPT 4.97 4.17 19% 4.60 8% Travel Visitors ('m) 24.0 27.3 (12)% 21.6 11% Transactions ('m) 17.0 22.7 (25)% 15.5 10% Revenue ( m) - Click-based 8.5 9.7 (12)% 7.1 20% Revenue ( m) - Total 9.5 11.1 (15)% 8.0 19% RPV 0.40 0.41 (2)% 0.37 8% RPT 0.50 0.43 16% 0.46 10% Home Services Visitors ('m) 8.4 3.8 119% 7.4 14% Transactions ('m) 1.9 0.9 120% 2.0 (4)% Revenue ( m) - Click-based 2.3 4.0 (42)% 3.3 (28)% Revenue ( m) - Total 2.4 4.1 (42)% 3.3 (27)% RPV 0.29 1.07 (73)% 0.45 (36)% RPT 1.22 4.62 (74)% 1.65 (26)% 40
KPIs - Internet H1 2009 H1 20 Growth Group Visitors ('m) 63.6 62.0 3% Transactions ('m) 31.6 39.6 (20%) Click Revenue ( m) 60.5 81.3 (26%) Other Revenue ( m) 7.3 13.8 (47%) Total Revenue ( m) 67.8 95.2 (29%) RPV 1.06 1.54 (31%) RPT 1.91 2.05 (7%) 41
Appendix Market Data Unique visitors by month 42
Q4 2007 Q1 20 Q2 20 Q3 20 Q4 20 Q1 2009 Apr- Jun- Aug- Oct- Dec- Feb-09 Apr-09 Mortgages Loans Cards Savings Markets we operate in Travel market trends Visitors leaving UK to go abroad (M) Utilities Annualised Percentage Churn Money Market Trends Annualised product purchase (M) 18.2 20 17.4 17.6 17.2 19 18 17 6.7 8.3 16 16 15 5.3 4.4 15.2 14 13 12 11 2.9 1.9 1.4 1.1 10 Gas Electricity Jun- Jun-092 Source: ONT Overseas travel and tourism Quarterly report Source: Datamonitor Source: GfK Financial Research Survey (FRS) 43